Social Justice Center (former EMC) responds to the decisions announced yesterday by the Administration of the Government of Georgia regarding the Namakhvani HPP project. The statement reaffirmed that the Government is still reluctant to engage in a democratic and meaningful dialogue about the project and that the proposals made are an attempt to deal with the problem in a more deceptive, superficial, and fragmented manner.

By failing to meet the most principal and paramount demands of the Rioni Valley Guards to suspend the construction of Namakhvani HPP, the Government has once again missed the opportunity for initiating a real, democratic, and fair dialogue, thus prompting the Rioni Valley Guards and their tens of thousands supporters to continue their protest on the streets. The Valley Guards state that the Government’s decision not to suspend the construction works in the valley diminishes the importance of the dialogue and immediately excludes a possibility for a real discussion and agreement; also, as long as the company continues the construction works in the valley, it means that the Government does not consider the possibility to abandon its decision on constructing the e hydropower plant construction in its existing form.

The other proposals of the Government are also fragmentary and weakly substantiated and are rather creating an illusion of a discussion than proposing a way towards problem resolution. As the Government has not disclosed the project’s cost-benefit, financial and legal assessment documents, and prima facie assessment of the Agreement by Social Justice Center reveals it bears no possibility for creating energy security and long-term economic benefits for the country, the revision of only particular aspects of the Agreement cannot become a base for the actual revision of the Government decision, and causes a legitimate distrust towards the such processes of revision.

It is also unfortunate that in this process the judiciary fails to play a proper role in protecting the rights and the public interest. Till now the judiciary has not commenced hearings over the ongoing dispute over the environmental decision drawn regarding the Namakhvani HPP.

Unfortunately, today’s decision of the Government can be considered as a disregard towards the concerns, criticism, and legitimate demands of the large-scale movement that is organized to protect the Rioni Valley. The Government once again failed to shift the processes into a political and rational framework. Along with the fact that the Government for several months already has been discrediting the leaders of the movement and has been trying to weaken the protest by using repressive methods, the decision made yesterday further undermines trust of the members of the movement and the public towards the Government and its proposal.

With this statement we argue that the Government proposals are problematic and unsubstantiated.

1. The proposal for Ministry of Justice to study the Agreement is unsubstantiated

The statement issued by the Administration of the Government states that with the request of the Prime Minister, the Ministry of Justice will study the contract signed with the company - “Enka”. It should be noted that according to the Georgian legislation, the legal examination of the Namakhvani Agreement is the prerogative of the Ministry of Justice. This means that the legal risks arising from this contract should have been assessed by the Ministry of Justice before the conclusion of the Agreement.. Moreover, to our knowledge, the Ministry of Justice has evaluated theNamakhvani HPP draft Agreement in 2019 and has prepared a respective legal conclusion/opinion. Consequently, tasking the Ministry of the Justice to re-assess the Agreement that is already assessed by it, is beyond comprehension.

Lack of openness and transparency around this project is one another problem that has already been identified. The legal opinion prepared by the Ministry of Justice is still not public. Social Justice Center has requested the Ministry of Justice, the Government Administration and the Ministry of Economy to issue this document,, however, despite the fact that deadlines for issuing public information have expired, we have not yet received the legal assessment from any of these agencies. Therefore, taking into account the high public interest, we once again call on the Government to immediately publish the legal assessment prepared by the Ministry of Justice on the draft Namakhvani HPP Agreement.

2. The proposal to examine the Agreement by international experts is unsubstantiated

As for another proposal of the Government regarding hiring an international law firm to study the compliance of the Namakhvani HPP Agreement with the international standards, the organization believes that the terms of the HPP Agreement should be assessed in the context of the country’s strategic needs and the project’s ability to contribute to, rather than be disconnected with these factors; And the terms of the contract cannot be substantially assessed by an international law firm when the state has not assessed the necessity of the project, its public benefits and economic feasibility. One of the ways the state can manifest the necessity of the project is through presenting the cost-benefit analysis: which is a document juxtaposing costs towards public benefits, and assesses whether the project is“worth” it.

Despite numerous requests to publish the cost-benefit analysis for the Namakhvani HPP project, the document is not public to date. Moreover, the public statements of the Minister of Economics create doubts that the cost-benefit analysis, that is required by law, does not even exist.

At the same time, the Ministry of Finance should, also, have assessed the financial risks related to the Namakhvani HPP project, however, most likely, there is no such document prepared by the Ministry of Finance, which is another fundamental violation of the legislation .

Consequently, when the State does not have an assessment of the benefits derived from the project, the financial risks associated, and, most importantly, has no long-term and strategic vision for electricity development, we consider that the evaluation of the given Agreement, disregarding the context, is meaningless.

Moreover, as already mentioned, the assessments of financial and legal risks arising from the contract falls within the competences of the state agencies, in particular, the Ministry of Finance and the Ministry of Justice, however their assessments are still unknown to the public. Thus, we once again call on the Government to immediately publish the essential documents required by Georgian legislation - such as the assessment outcomes of the Ministry of Justice and the Ministry of Finance, and the project’s cost-benefit analysis, instead of initiating vague working formats.

3. Moratorium on the the dam construction is unsubstantiated

While the State has announced that it establishes a "moratorium" on the construction of the dam of the Namakhvani HPP project, it needs to be noted that according to the construction permits "Enka" has no rights to engage in building the dam until the relevant construction project documentation and expert opinions are submitted. Consequently, with the announcement of the “moratorium” the Government creates an illusion of a compromise, while in the absence of a permit for a dam construction the "suspension of construction" cannot be considered as a concession.

4. The statement allowing only preparatory works is unsubstantiated

It should also be noted that the Government's statement that the company is only carrying out the preparatory work is deceitful; Given the scale of the work that the company has carried out on the site, it can be concluded that the process has long past the scope of the preparatory works that on one occasion was, also, confirmed by the Ministry of Economy; According to the official information, the company had already started the construction of the diversion tunnel (the main construction and not only the preparatory work), and, in January of this year, Enka was engaged in illegal construction of the dam that was in gross violation of the permit’s conditions, which resulted in the company being fined by the Department of Environmental Supervision.

Having considered all the facts discussed above, the organization believes that unilateral decisions made by the Government yesterday do not respond to the challenges surrounding the project and to the demands of a large-scale public protest. Thus, we once again call on the Government of Georgia:

• Take an immediate decision to suspend the construction of the Namakhvani HPP until the consensus is reached so that the substantial discussions and meaningful dialogue around the project is commenced;
• Make the documents required by legislation publicly available, these include - project’s cost-benefit analysis, opinions of the Ministry of Finance and Ministry of Justice;
• Discuss the current situation and the next steps, including the initiatives voiced today with the local and general public, after the construction work is suspended.

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